Maintenance and Unit Titles

As 1 October 2012 approaches there is a big issue looming in addition to sorting out your rules. It’s the change in the maintenance regime. Not so much the compulsory requirement that a body corporate have a long term maintenance plan, which everyone seems to be on top of. Rather the fact that the body corporate becomes responsible for the maintenance of “building elements” and “infrastructure”, in addition to the common property.

These have relatively lengthy definitions in the 2010 Act. Building elements that will become the body corporate’s responsibility can be external or internal. They are any part of the building that relates to or serves more than 1 unit and are necessary to the structural integrity, the exterior aesthetics, or the health and safety of occupants. Infrastructure is essentially all shared services and utilities, whether to or from a unit or to or from the common property.

Clearly this is beneficial where a common system needs the body corporate to take responsibility so that in-fighting does not slow a resolution e.g. leaky apartments needing cladding repair. But there is potential for arguments of a different kind now, particularly if a unit owner does not want to or cannot pay to repair items within or outside their unit that the body corporate has traditionally viewed as the individual owner’s responsibility.

Decks are a good example as these are now building elements if they fall within the definition above. What if the issues are not common, but simply an individual unit owner who has not kept up general repair of timber decking, so that it needs boards replaced? Come 1 October 2012 the body corporate seems to inherit this responsibility.

In the long term maintenance plan the body corporate can elect to include additional items or exclude items that technically are the body corporate’s responsibility. But excluding them from the plan will not change the underlying liability for the body corporate.

Body corporates need to be budgeting now for this additional expenditure. That probably means higher levies across the board? Even if there is not a long term maintenance fund (because a body corporate can choose not to have this fund) the maintenance allowance in the budget will no doubt need to increase. Do not overlook that the long term maintenance fund (if established) must be spent on items in the long term maintenance plan. What happens to unplanned maintenance? Paid from the operating account if there are sufficient funds and the requirements in the Regulations can be complied with or perhaps separately funded, or a resolution passed to transfer money from the long term maintenance fund to the operating account.

If a body corporate is updating rules, this is the time to consider these issues, if a body corporate has not already. If new rules are registered earlier than 1 October 2012 then a decision should also be made whether to opt into the above regime early, or wait for it to take effect by default come the end of September.

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